Pain for Qantas as other carriers flourish
Qantas has revealed a massive full-year loss of $2.84 billion, a result far worse than the most dire of predictions.
The airline is blaming weak demand in Australia, subdued consumer and business confidence and higher fuel prices for the loss, the worst in the company’s history. In a statement, Qantas chief executive Alan Joyce said the airline had “come through the worst”.
Earlier this year Qantas announced it was cutting 5000 jobs over the next three years to try to rein in costs – 2500 of them have already gone. Qantas Airways is setting up a new holding company for its international division – a change that could allow it to sell up to 49 per cent of the business to an outside investor. The move was made possible by changes to the Qantas Sale Act that removed restrictions on a single airline owning more than 25 per cent or a group of airlines owning more than 35 per cent of the company. Mr Joyce said the split increased the potential for investment but cautioned it could take time to find an investor interested in the business.
He said the focus for now was on cutting $2 billion of costs over three years, of which up to $1 billion will come from the international division.
Meanwhile Air New Zealand produced an excellent financial result with earnings before tax of $NZ332 million, up 30 per cent. Operating revenue of $NZ4.7 billion was up 1% (3.2% excluding foreign exchange). Chairman Tony Carter said that the result represented the third consecutive year of strong earnings growth for the airline.
In contrast to the Qantas result, from 2009 to 2013 Cathay Pacific made $3.8 billion in profit, Singapore Airlines $2.5 billion and Air New Zealand $358 million. Virgin International lost $356 million.
Mr Joyce has earned $22.2 million as chief executive and in the 2012-13 financial year his $5.1 million package matches the combined salaries of the Cathay, Singapore and Air New Zealand chiefs. Qantas shares are presently worth 40 per cent less than when Mr Joyce took over.
